Holacracy: Is It Passing the Real World Test?

holacracy, management, ZapposManagement theories often reflect the times in which they emerge. The good ones withstand the poking and prodding that comes from people wondering if the theory works in the real world. Holacracy is one of the latest theories to emerge.

What is holacracy?

According to holacracy.org, it is described as a social technology. It was started in 2007 by Brian Robertson. While it is much more involved than I can describe here in a blog post, it has a constitution which provides detailed description about how an organization is governed, how and when to organize circles, decision-making and responding to “tensions.” The main point is to “get the work done.” It distributes authority throughout the organization via circles so there is no manager in the traditional sense. There is quite a difference in vocabulary as you dive deeper into holacracy.

Role: This is not a person. It is actually the task, function or activity involved in achieving a purpose on behalf of the organization.

Circle: A group of people organized to fulfill a function within the organization. These circles may be formed or reorganized at a governance meeting to meet the needs and aims of the company.

*Olivier Compagne of HolacracyOne was kind enough to clarify the definitions in his comment below. The Circle is not a group of people as I wrote. Mr. Compagnie explains that it is the group of roles and people can fill one or more of these roles. In my research, it was also stated that people may fill these roles in more than one circle. The people are called “partners.”

Governance meetings: These meetings evaluate how the company is operating and respond to any problems or glitches (termed “tensions”). A member of the circles, the Rep Link, can propose a change or protest changes to his/her circle. The constitution outlines in detail what procedures must be followed for the benefit of the organization.

*Mr. Compagne also kindly clarified that there are governance meetings for each circle besides the ones evaluating how the company is operating and responding. He also clarified that any circle member (partner) can propose changes

Partner: This person is a member of a circle and responsible for working a specific project, accountability and noticing problems or issues, “tensions.”

Rep Link, Lead Link, Secretary, Facilitator: These core roles in a circle are elected roles which serve to manage the project and keep it on time and organized, represent the circle in governance meetings and take care of any unfilled roles.

There is much more to this model. Essentially, holacracy provides a clear structure that supports the purpose of the organization and rearranges the hierarchy to ease the process of how the work is completed. Everyone in the organization is urged to participate in their circles, notice problem areas and respect the areas that are the responsibility of other circles. There is still a hierarchy even without the management titles but it does support all members of an organization to have a voice and decision-making authority.

Critiques of holacracy

Holacracy is probably not a clear management theory. It is really more an organizational system and tool for companies to meet their mission. Zappos is one of the most well-known companies adopting this system and it makes sense for them. Zappos has a history of adopting unconventional practices that work well for it. However, that is one company. Is holacracy a system that other companies can adopt successfully?

Might be better suited for small companies: This seems apparent since smaller organizations can act with agility and engage its employees more readily. There is less bureaucracy so a new system can be adopted and made part of the whole operation. Larger companies tend to have more institutional memory, the likelihood of disengaged workers and overlapping or duplicating systems in place.

It is a complicated system to learn: Despite a constitution that spells out how to organize and get the work done, it is not an easy read nor does it really define the terms well.

Management theories and models often don’t last: Holacracy could be a flash in a pan or even a model that only works in certain types of companies (think small, fast growing). It seems to depend on the workers being able to tolerate ambiguity while following a certain set of procedures at all times.

Buy in of the organization’s values: William Tincup expresses concerns that it could be more like a cult because you have to “hire to it, fire to it, live it…each and everyday. Bye bye values!”

Clarity of daily work and future direction of the organization: One of the areas holacracy is very strong is the delineation between the work on which each circle is focused and the strategic direction. Also the purpose of the organization is reinforced.

This is just the beginning

Holacracy is a new way of thinking about managment and it challenges one to consider how work and people are organized. It will be interesting to see over the next few years how Zappos performs once they complete the process of adopting this new system.

Are you familiar with holacracy? How do you see it operating in the real world? Add your thoughts and opinions to the Twitter chat, #KaizenBiz Friday, July 11, 2014 at 5pm GMT/12pm ET/9am PT.

What do you know about holacracy?

How could holacracy reduce the problem of disengaged workers?

Why would a Lead Link rather than a Manager be a more effective way to assign tasks and manage the work of the circle?

How do people design their careers in a holocratic organization?

Would you say that holacracy work work better in retail, tech companies, health care organizations or somewhere else?

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A Deeper Dive into What #SocialMedia Trends Mean: Innovation & Biz Disruption

Technology social media the internetI’m Cathy Larkin, @CathyWebSavvyPR, a part of the team that supports Kaizenbiz chat. This week on Kaizenbiz I’m hosting, while Elli, @3Keyscoach, is not available. We’ll take a dive into the deeper waters of social media trends. Bring your favorite or least favorite social media trend to discuss. But let’s not just make it a love/hate complaining fest, but take a look into the whys and how it affects larger issues, or how they affect your business or industry. Join us Friday April 5th, 2014, 5 pm GMT/12pm ET/9am on Twitter, follow the #Kaizenbiz hashtag.

To bring us deeper into the topic – check out this video (and written transcript) from @McKinsey (McKinsey and Company)

Why every leader should care about digitization and disruptive innovation:

“For the first time we now have technology effecting every single sector of the economy….” Their post is about more than social media, but provides a strong context for our discussion… also from the video & @amcafee: “Lots of things are being digitized…our social interactions are being digitized largely thanks to all the different social networks and the social media that we have…,” “There’s good news and challenges here…”

To put this in perspective – here’s a reminder of how far we’ve come since the early days of the internet. We’ve come a long way from this news story in 1981 when cutting-edge folks took 2 hours to download the news paper to their computers  via dial-up modem (at $5/hour): http://www.wimp.com/theinternet/.

socialmediamap-1-MotherJones-com

A map from mother Jones 3/28/14 story: MAP: Here Are the Countries That Block Facebook, Twitter, and YouTube – click to see article

Social media has been key in helping people around the world connect with one another and organize. This has caused some countries to block access to these sites.  This post shows a map of the various countries that as of March, 2014 have blocked these services; click to see the full story: MAP: Here Are the Countries That Block Facebook, Twitter, and YouTube.

On the up side: social media has also been used to help people around the world connect to information during disasters and other world events. Here’s a short post on how social media and other technology tricks worked to help save lives during the recent Chilean Earthquake: Chile Uses Earthquake Communication Technology To Saves Lives

Facebook Bait and Switch – How’s That for a Trend?

Facebook convinced many businesses, large & small to get lots of likes to their pages, with the assumption that when their customers were online, they would see the biz updates. Now with Facebook’s new proposed algorithm change – a tiny percentage of a business’s fans will see the posts – unless they PAY to promote it.

This is not the first major change made to make things better for Facebook, and often worse for their users. Did Facebook break a brand promise? Are they so big they can do what they want? How might setting a trend like this at Facebook, make Twitter and Google rethink their own pricing models. How will this affect your business?

And What About Twitter’s new Gambit – they are Considering Simplifying to Entice New Users to Stay or One-time Users to Return

Twitter is talking about doing away with two if their earlier innovations – the @ sign and  the #hashtag that was started by customers. They are trying to simplify or “dumb down” to regain 1billion lost users…great idea or alienate main user base?

Will new pressures to raise money after they went public drive users away?

On the Other Hand…LinkedIn Seems to be Gaining Traction, Yet Making Missteps Too

LinkedIn plans on adding blogs for members, but on the other hand has given the power to group owners to block people from commenting and posting in groups without being moderated…across the entire site – not just that group.

So How Disruptive ARE Social Sites to Business?

So many businesses and individuals build connections on these platforms to then have the rules change again and again – sometimes for the better, sometimes for worse. Yes it is a business like Twitter, Facebook and LinkedIn’s right to change their options and terms of service, but the disruptive nature of innovation has consequences in the short and long term.

#Kaizenbiz Chat Questions

**QUEST 1 How do you think technology or #socialmedia trends have had positive effects in the world?

**QUEST 2 How have recent technology trends promoted #socialmedia to disrupt business strategy?

**QUEST 3 Are social sites making progress, alienating users or going all 1984/big brother?

**QUEST 4 How might FBk’s setting a trend of paying to access yr fans make Twitter, Google & LinkedIn rethink their pricing

**QUEST 5 What effect might Twitter’s potential simplifying to cater to new users have on your existing biz?

Next week, Elli St. George Godfrey will be back and we’re talking about business resilience in the current business climate

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Okay, Managers, How Do You Keep Good Employees?

managers, keep good employees, stay interviews, performance coachingWhile you may be reading news articles reporting how many jobs were created in your region of the world, it is often interesting to see if this is a localized event or something bigger. According to a 2013 Manpower Employment Outlook Survey, global trends point to positive growth but survey after survey of employee engagement still report dismal numbers.

So, what’s a manager to do with the new and existing employees?

We have discussed employee engagement before on the Twitter chat, #KaizenBiz but we usually look at it from the employee’s perspective. But there are certain challenges for managers. There is plenty of advice to be more authentic and to act as more of a facilitator of people’s talents and personalities. There are many workplace trends that affect the nature of management. And yet, the basics tasks of management haven’t changed. Managers are still expected to plan, organize, coordinate, encourage, provide and monitor their staff. The methods may change over time but not the essential job.

But aren’t the methods really at the nub of finding and keeping good employees?

This is where the 21st workplace is something of a crucible for managers. Leaders may navigate the company as a whole through the turbulence left in the wake of the Great Recession, rapid technological changes and other factors but managers are the ones who are making sure the actual work gets done. There is always a search for more effective or efficient ways to identify the “right” employee or process that support meeting the business goals. It might be stack ranking or some other talent management system. It may even be the never-ending search for the best project management or productivity tools. But all of these tools cannot replace the most basic of managerial skills –the ability to relate and communicate. These skills are what are cited time and again in employee engagement surveys.

Two possible avenues to support managers engaging with their employees better

Keeping top-notch employees is certainly a goal for any manager. One avenue is to conduct “stay interviews.” Rather than waiting for the exit interview to find out what one of your star employees did not like, stay interviews are one-on-one conversations reviewing the employee’s career goals, rating current performance and possible action steps to maintain (or increase) the employee’s engagement.

Another avenue is to adding performance coaching skills. In a previous career, I supervised mental health clinicians and found that facilitating their learning and insight both helped them provide better therapy but it also helped me know where their blind spots were and what kinds of clients they were best suited for. According to Josh Patrick, this process is far superior to performance reviews since performance coaching conversations could be on-going brief meetings and formalizes what managers are already doing when they check in with employees regarding assigned projects.

What do you think? What tools or behaviors can a manager use to keep good employees engaged? Join us Friday, February 14, 2014 at 5pm GMT/12pm ET/9am PT to discuss how managers can keep good employees on the Twitter chat, #KaizenBiz 

What types of skills are most necessary for managing employees well?

To what degree do we act as if planning, organizing, coordinating and monitoring is not connected to the quality of the relationship between managers and direct reports?

What current management trends are getting in the way of facilitating employees’ performance?

Along with stay interviews and performance coaching, what other things can managers do to keep good employees?

About the author:  Elli St.George Godfrey, founder of Ability Success Growth, executive coach, trainer and international expansion consultant, is the host of KaizenBiz. I’m passionate about business becoming a more human-centered place so I host this chat to connect business ideas and develop people.This passion shows up in my work with my clients. Whether you are expanding locally or internationally, Ability Success Growth guides established small to mid-sized business owners and executives to unlock the CEO within during times of transition and growth.

 

 

 

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E-commerce vs Traditional Retail the future of both: Friends, Enemies or “Frenemies”

ecommerce image by Cathy LarkinThis chat idea stemmed from a couple of blog posts about e-commerce (and its sibling “m-commerce” for mobile/smart phone/tablet commerce) and the effects on retail and bricks-and-mortar or traditional commerce and shopping. One of them was from Smallbusinesstrends.com: Ten Approaches That May Shape the Future of eCommerce.

Let’s define our commerce terms

E-commerce – selling goods (physical or digital) or services via the internet (via a computer) or mobile phone or tablet. Other related terms: e-shopping, m-commerce. And the newest trend, smart TV-shopping. Already TV retailers like QVC and HSN have an option to shop using your remote…even without a smart TV. In days to come, that may be the tip of the TV-shopping iceberg. My prediction…I think one day you will see something on TV, click your remote and be directed to the website that sells the shirt the actor is wearing. Catalog retailers have been one of the winners in the e-commerce wars. Many turning their paper catalogs into more robust online stores.

We often hear doomsday predictions when a new technology disrupts the “traditional” landscape…

While Radio didn’t kill live performances or books, TV didn’t kill radio, and the internet didn’t kill TV – each new technological improvement did force the purveyors of the old to adapt. But we’ve already seen evidence that Amazon’s e-commerce activities were likely a factor in the demise of Borders Books & Music, both online and their bricks-and-mortar stores. Who is next to go down? Or who is the next bricks-and-mortar retailer to embrace online technology and grow their business? Personally, I prefer to try something on or to hold an item in my hand before buying. While I welcome the innovations of e-commerce, I hope my favorite stores manage to adapt and stick around.

There is a tug of war going on between traditional retail and ecommerce

Both types of stores keep trying to up their game to capture the attention of their customers. Some companies keep trying various ways to customize the customer experience. This can be a workable strategy, or a never-ending wild goose chase. How a store or website looks and functions is important, but beware of innovating too far ahead of your customers. As JCPenny’s former CEO found out. JCPenney: Customers Are Confused By Mobile POS, So Let’s Try Lanyards And Carts a post from Fierce Retail. They tried mobile point of sale checkout, but many customers looking for the cash register…couldn’t find the check out people.  An online example is remarketing or retargeted ads – ads that follow you around the internet after you browse and online merchant. To some they are creepy…like the store sales associate who won’t leave you alone to shop. I find retargeting a waste, as they often chase me long after I have bought from another online merchant, store or brand.

Another trend: cross-channel integration

Trying to make sure the website recognizes the customer on web or smart phone, and have similar branding in store and on social media. For larger operations this can be costly, but can lead to stronger customer loyalty. For smaller companies, it might be too costly, although similar branding in store and on the web should be achievable.

Responsive web design

This also a growing trend. Instead of having a separately-built mobile site, many sites are shifting their M-commerce -to mobile-responsive sites – one that resizes itself to size of screen. While I think this is good, some customer-friendly features can get lost in the simple responsive sites. tablets work well, but on smart phones, sometimes a dedicated site makes more sense. Although responsive web design is still in it’s infancy. I’m betting we will see more innovations here.

Scalability

Retailers, online and off, need to manage growth wisely. It’s not good enough to sell lots of products these days…to last you have to sell good products, with an easy to navigate online and/or offline store, handle shipping and fulfillment to the customer, and try and bring them back for more. S/he who masters those items will rocket ahead, especially when dissatisfied customers can squawk loudly via social media. Estimates suggest that the cost of acquiring a new customer is 21 times more than keeping an existing one.

E-commerce cons:

One thing that is still missing  from the online shopping experience is the personal touch. Customer reviews and “chat with a rep” features help, but you also can’t try clothing on when shopping online. But there is often a trust factor with customer reviews, which some people don’t trust. Let’s face it they can be gamed. Also, some are still loath to trust their credit cards to the whims of the internet and problems of identity theft.

Online e-commerce venues seem to have gotten the view and buy product thing right, but are still struggling with keeping customers happy after the sale – shipping, handling etc. Also from @FierceRetail: EBay Now Racing Amazon For A Delivery Foothold, Expands From Mobile To The Web.

There is some hope for traditional retail…

Millennials Pick Walmart Over Amazon—At Least After They Become Parents

One study indicates that millennials end up selecting Walmart as their store of choice, over Amazon, after they become parents.

New retail trends..pop-up retail

Like the food truck, pop-up retail has taken off in a big way in the U.S. it can be a great way to test products, concepts and generate buzz with less investment for small innovators, and for larger retailers as well. works great with social media to let people know where the physical location of the store is. Mobile commerce has fueled this growth. This ideas came from a white paper available on FierceRetail.com.

Questions:

Do you think Traditional retail shopping and e/m-commerce are friends, enemies or frenemies? Why?

What shopping trend do you think will have the largest effect on the retail landscape & why in next 10 years?

What impact does Social media have on either traditional retail or e-commerce activity?

Can you give examples of a bricks-and-mortar stores that are embracing online, mobile, or smart-TV shopping?

What can we do, as consumers or retail professionals, to help bridge the gap between brick-and-mortar and online stores?

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Can You Train Customers To Do New Tricks?

Customers and changing shopping habitsIn the US, there has been a lot of talk about how the retailer, JC Penney, missed the boat when they eliminated sales and stated they were offering the lowest price without coupons or sales. In fact, JC Penney reported that they missed their expected sales goals of $3.4 billion. What happened?

Overview of the JC Penney story

After Ron Johnson, architect of Apple’s retail success, joined JC Penney as CEO, a major overhaul was begun. Previously JC Penney was a stolid retailer. With the massive change plan being implemented, the stores were remodeled so that there are mini-shops or boutiques within the store. The American retailer changed their merchandise as well as their pricing strategy. They explained that it is a “fair and square” deal to have customers pay a low price any time they shop without using coupons or attending sales.

Do customers prefer the status quo?

One theory being proposed as to why JC Penney is struggling with customers is that they prefer coupons and sales to one low price. It has been a harsh lesson for this retailer and Johnson has stated a belief that “coupons were a drug; they really drove traffic.” (An interesting note-as reported on TheStreet.com on May 31, 2012, JC Penney is adding “Best Price Fridays”)

It sounds more like the thrill of the hunt as a shopper looks for the best deal at the best time. Is this unique to US consumers? Different countries have their own shopping cultures. In some countries, the price is the price and there are no sales. In other countries, it is expected that the customer will haggle with the seller for  a mutually satisfactory price.

Certain expectations

No matter where a customer is geographically, there are certain expectations about what type of merchandise is offered, how the store is laid out and what the price points will be like. For many customers, they are aware that the stores are marking up the price so when they get a “good deal”, shopping feels rewarding. (There are other psychological things going on too.)

But what if the store tries to change the status quo?

That is what JC Penney tried to do and it was received poorly. Customers either stopped going to the stores or reduced the number of purchases. It seems to be based more on habit. Take traffic flow in stores. In the US, shoppers start on the right side and go around counter-clockwise while in the UK, the preferred path is to start on the left and go around clockwise. Customers will continue with their habitual path even if stores design their layouts in the opposite direction.

But what about online shopping?

In an Internet Retailer article, customer behavior is becoming habitual as well. There are expectations about discounts and shipping costs. Price comparisons are a click away on laptops and mobile devices. There are apps and websites that simplify this so shoppers find what they want more efficiently. In fact, globally, online shopping is on the rise and there are distinct habitsabout where and when people shop. One such habit is using the shopping cart as a wish list and waiting for the best price to be posted. This is making online retailers scratch their heads on how to get people to just buy the item right there and then.

Can retailers change how customers shop?

This seems to be a tall order. There seem to be a lot of variables that could create failure for a retailer, regardless if they are online or a brick and mortar store. Certainly JC Penney bucked current trends by stating they did not want to do business as usual. They declared they were not marking up their merchandise just to give a false sense of saving money. But regardless if you are selling in a brick and mortar business or an online business, people are looking for the discounted price because the perception is that you are paying too much if you go with the stated price. Perhaps the consumer mindset is too set in habits?

How would you describe the shopping habits where you live?

What shopping habits were affected by the recession (or are still affected by a poor economy)?

What are the top variables a retailer needs to consider before altering how they sell to customers?

How do you train customers to shop “your” way?

 

 

 

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Is Mark Zuckerberg Changing How Companies Are Controlled?

Mark Zuckerberg and Facebook IPOYou might like or hate Facebook and it seems unlikely that Facebook could be any more ubiquitous but there you have it. The IPO is imminent and huge. A particularly interesting detail is how Zuckerberg has positioned himself to maintain the majority control over Facebook.

Could Zuckerberg be on to something here?

Public companies usually have the CEO, the executive team and the board of directors looking out for the shareholders. While customers are providing the revenue, it is the shareholders who tend to get preferred treatment. Generally, the CEO is appointed by the board so he or she may have to obtain approval for some decisions. Overall, CEO’s are the  major decision makers and consequently hold a lot of power.

But what is different here is how Mark Zuckerberg holds the lion’s share and thus, a lot more power than is usual in public companies.  According to an article by Matthew Yglesias on Slate, Zuckerberg has a work-around so that he will end up with 57% of the voting rights due to ownership of Class A and of Class B stock that becomes Class A when sold. Yglesias explains that when Zuckerberg’s partners cash out, he adds this to the stock he already owns. This is how he ends up with 57% and majority control.

Maybe Zuckerberg isn’t that unusual?

Other companies like Ford Motor Company and Google do something similar. Split shares are used so that founders and/or family members can maintain ownership and the power to steer the company in their preferred direction with minimal interference. In fact, Google just announced its stock split in April of 2012 (at the time of this post,

The other key factor is that Facebook will be considered a “controlled company” with exemptions. This structure enables Zuckerberg to have the leeway to do things like have Facebook acquire Instagram without a lot of checks and balances.

A need to be nimble

There are lots of things that can be said about founders of startups. Zuckerberg fits in with his high level of confidence and a vision of how Facebook can change the world. But Google’s recent announcement of creating split shares adds an interesting angle to the way Facebook will be owned. In a letter published by the Business Insider, Larry Page and Sergey Brin wrote,

.”..after careful consideration with our board of directors, we have decided that maintaining this founder-led approach is in the best interests of Google, our shareholders and our users. Having the flexibility to use stock without diluting our structure will help ensure we are set up for success for decades to come.”

It seems that Zuckerberg might be thinking along the same lines. If he has control over how decisions are made, this keeps Facebook able to respond to trends and changes.

Is Zuckerberg on the vanguard of how founders transition into CEO’s of a publicly traded company? Why or why not?

How could the marketplace be so volatile that so much agility is required to stay competitive?

Is this practice is not so unusual, why is there so much attention being paid to Zuckerberg’s majority ownership?

*Photo credit: Steve Miller

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This Week’s Chat Plays With Nick Kellet and Gamification

Since I’m always looking for interesting business topics and even more interesting guests, I was intrigued when Caroline Di Diego and Brandie McCallum recommended Nick Kellet. Nick brings such energy and enthusiasm to what he does!

Gamification is popping up everywhere

After noticing so many references to gamification in marketing and encouraging productivity, it seemed only natural to bring the topic to the Twitter chat, #KaizenBiz. Basically, gamification is the application of game design and game techniques to non-game situations. But gamification is so much more.

Our guest, Nick Kellet

Some people are familiar with Nick’s new venture, List.ly which he co-founded with Shyam Subramanyan. It is a site that lists questions and answers to a variety of topics and groups. (You can see an example here which Kaizen Biz sponsors) Did you know that Nick created a game also?

He describes himself as “inventor of GiftTRAP, Co-Founder at Listly. Former VP, New Markets at Business Objects, Founder of Next Action Technology, creator of AnswerSets, British-born, Canadian-adopted family-guy”. You can learn more about him on his website.

Gamification really made a difference in his work and his life

While creating GiftTRAP, he got to explore game design and discovered there is so much more. Read his framing post and get ready for a lively conversation!

Discussion questions:

  1. How do you describe gamification?
  2. What kinds of engagement between people does gamification encourage?
  3. How is game design similar to designing a startup/business venture?
  4. If the best game designs rely on story to help engagement, what role does storytelling play in creating a business?
  5. How would you know a team/staff has an appreciation for game?
  6. Where would gamification make a difference to the momentum/growth of a startup/business?

Please join us on Friday, April 20, 2012 at 5pm BST/12pm ET/9am PT for the Twitter chat, #KaizenBiz. You can access the chat by using TweetChat or TweetGrid (unless you already use TweetDeck).

 

 

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